Unilever shares slump after Kraft Heinz deal collapses

SHARES in Unilever have slumped after US food giant Kraft Heinz called off its proposed £115 billion megamerger with the consumer goods firm.

The Anglo-Dutch company dropped nearly seven per cent on the London Stock Exchange following a joint statement by the two companies which said Kraft Heinz had “amicably agreed” to withdraw its proposal.

Unilever had issued a strongly-worded rebuttal on Friday after the Chicagobased company tabled an offer representing an 18 per cent premium on Unilever’s closing share price on February 16.

The deal would have been the biggest acquisition of a British company on record based on offer value.

A joint statement by the two companies read: “Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies. Unilever and Kraft Heinz hold each other in high regard.”

Kraft Heinz brands include Heinz tomato ketchup and Philadelphia cheese, while Unilever owns storecupboard staples such as Marmite, PG Tips and Hellmann’s.

The proposed tie-up was expected to meet strong political opposition, with Prime Minister Theresa May said to have asked officials to look at the deal.

Mrs May vowed last year to devise a “proper industrial strategy’’ to defend UK companies from being snapped up by foreign firms.

US and Asian businesses haverampeduptheirinterest in buying British following the pound’s 17 per cent plunge against the US dollar since the Brexit vote.

Kraft came under fire in 2010 after pledging to keep a Cadbury factory open in Somerdale, near Bristol, only to perform a U-turn soon after securing a £11.5 billion hostile takeover of the UK chocolate firm and move production to Poland.

In 2012, the business spun off the Dairy Milkmaker into a new company called Mondelez.

Kraft Heinz was born three years later after Kraft Foods became the subject of a £36.2 bn takeover by HJ Heinz Co

It is owned by US business magnate Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital.